U.S. crude oil hasn’t been this expensive, compared with global benchmark Brent, in almost half a decade.
West Texas Intermediate futures are up 0.6% at $73.29 a barrel this morning, a fresh two-and-a-half-year high. Their discount to London-traded Brent has shrunk to about $1.30 a barrel, the narrowest gap between the two markets since November 2016.
Why does that matter? It shows that demand for fuel is recovering faster in the U.S. than in other regions, according to RBC Capital Markets strategist Michael Tran. A slim gap between WTI and Brent chokes off crude exports while encouraging oil to flow to the U.S. from overseas to quench that thirst.
Demand for oil is rising around the world, however. One indicator that refiners are snapping up crude: The premium traders are willing to pay for Nigerian crude over Brent recently jumped to its highest level in almost a year, according to RBC.
Nigerian oil trades on a short-term basis and can be shipped to both Europe and Asia, making it highly sensitive to global shifts in demand.
